How is Maximum Drawdown calculated?

Maximum Drawdown represents the total equity decrease allowed from the highest equity point achieved since the account was created. If the trader’s equity falls below the allowed threshold, the account is automatically disabled.

  • Calculation considers both realized and unrealized PnL.
  • Drawdown limits do not reset or adjust based on recent performance.
  • The rule remains constant for the duration of the evaluation.

The purpose of the drawdown rule is to ensure long-term consistency rather than temporary bursts of high-risk performance.

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How is Maximum Drawdown calculated?

Maximum Drawdown represents the total equity decrease allowed from the highest equity point achieved since the account was created. If the trader’s equity falls below the allowed threshold, the account is automatically disabled.

  • Calculation considers both realized and unrealized PnL.
  • Drawdown limits do not reset or adjust based on recent performance.
  • The rule remains constant for the duration of the evaluation.

The purpose of the drawdown rule is to ensure long-term consistency rather than temporary bursts of high-risk performance.